Applied Materials warns of tough economies

Reuters News
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Posted: Jul 12, 2011 11:59 AM
Applied Materials warns of tough economies

SAN FRANCISCO (Reuters) - Chip manufacturing equipment maker Applied Materials <AMAT.O> said tough economic conditions in Europe and the United States were hurting demand, and it maintained its forecast for slower quarterly revenue.

"We see the problems in Greece; we see unemployment and slow economic growth here in the U.S., inflation in China," Chief Executive Officer Mike Splinter told investors at a conference. "These things are weighing on the market and weighing on demand for the products of our customers."

Applied Materials warned in May that it expected revenue in the current quarter to be down 3 percent to 10 percent sequentially, implying revenue of $2.57 billion to $2.77 billion.

Splinter said investment by foundries and DRAM chipmakers remained soft, although spending on equipment to make chips for tablet computers was a bright spot.

"We're seeing tablet buying power that's going to end up to be 50 million units, and it seems to be all about iPad 2," he said. "The number of other offerings we thought would come into this market are starting to come, but the volume success really has not happened yet."

Shares of Applied Materials were down 1.7 percent at $12.76.

(Reporting by Noel Randewich; Editing by Lisa Von Ahn)